Benchmarks declined from record highs on Monday as investors weighed impact of rise in coronavirus cases and ongoing political turmoil on economic growth.
The Dow Jones Industrial Average (DJI) fell 89.28 points, or 0.3%, to close at 31,008.69 and the S&P 500 shed 25.07 points, or 0.7%, to close at 3,799.61. The Nasdaq Composite Index closed at 13,036.43, declining 165.54 points, or 1.3%. The fear-gauge CBOE Volatility Index (VIX) increased 11.7%, to close at 24.08. Declining issues outnumbered advancing ones for 2.8-to-1 ratio on the NYSE and a 1.9-to-1 ratio on the Nasdaq favored decliners.
How Did the Benchmarks Perform?
Benchmarks made a solid start of the year last week, however, violent protested at the Capitol and rise in coronavirus cases faded out hopes that had helped markets rally on prospects for additional fiscal stimulus. On Monday, seven out of the 11 major sectors of the S&P 500, closed in the red, with consumer discretionary, communication services and real estate sectors declining at least 1.7%.
After declining more than 300 points at its session low, the blue-chip Dow closed 0.3% lower. Apple Inc. AAPL was among Dow’s decliners, share of this tech-giant closed 2.3% lower for the session. Apple holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among the biggest decliners of the Nasdaq are BioMarin Pharmaceutical Inc. BMRN, Baidu, Inc. BIDU and Tesla, Inc. TSLA, that closed 9.6%, 8.6% and 7.8% lower, respectively, on Monday.
Overall, the S&P 500 posted 14 new 52-week highs and no new lows, while the Nasdaq Composite recorded 78 new highs and two new lows.
Political Turmoil Drags Indexes off Record Highs
While investors focused on the prospects of a steady economic recovery as President-elect Joe Biden takes oath on Jan 20, Biden administration is expected to ramp up vaccinations and provide an additional fiscal stimulus. However, political disruptions and rise in coronavirus cases gave investors jitters.
On Monday, Democrats unveiled an article of impeachment, planning to impeach President Donald Trump for an unprecedented second time. The article of impeachment charges Trump with high crimes and disrupting the peaceful transfer of power. Last week a mob of Trump supporters attacked the Capitol during Congress’ electoral vote count and accounted for the death of five people.
According to House Majority Leader Steny Hoyer, the chamber will take two separate steps for the impeachment. Firstly, the House plans to pass a resolution on Tuesday night, which involves calling in Vice President Mike Pence and the Cabinet to invoke the 25th Amendment that will remove Trump from the office. After that the House will meet on Wednesday morning to consider the impeachment.
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